American Society of Magazine Editors

Blurred Lines: FTC Looks at Native Advertising

February 14, 2014

The hot trend of native advertising – often described as digital advertorial – has caught the eye of more than just magazine publishers.  The Federal Trade Commission (FTC) has noticed too, and dedicated an entire day in late December to an examination of the issue.  

Expressing concern that consumers might be unable to distinguish native ads from native content, the Commission intended the workshop to help it determine if additional guidance is needed on the subject.   On hand to help the Commission were academics, advertisers, publishers and editors, and a host of others engaged in the native advertising space.  

There was clear consensus from the panelists that transparency and disclosure are essential, though how to provide that was somewhat vague.  Academic research on consumer response to native advertising was equally ambiguous.  Also left unanswered were questions of particular interest for publishers, including the need for publishers to disclose if they are the creator of the advertising content, and the best ways in which to label native advertising.

Jessica Rich, the director of the FTC’s Bureau of Consumer Protection, noted and encouraged industries’ interest in developing best practices.  ASME (American Society of Magazine Editors) was recognized specifically for its efforts, and ASME Chief Executive Officer Sid Holt was a vocal participant on a panel dedicated to the subject.

Ultimately, as Mary Engle, the FTC’s associate director of advertising practices remarked “this [workshop] raised more questions than it answered.”  Given the Commission’s interest in the subject and long history of bringing cases against ads masquerading as editorial, it’s likely this is not the last we will hear from the Commission on this topic.